NEW YORK (TheStreet) -- The year is just about over, so here is a final report card on my 2014 healthcare stock predictions:
"The launch of Gilead Sciences' (GILD) hepatitis C drug Sovaldi will be tremendously strong in early 2014, propelling the company's market value past Merck (MRK) . However, sofosbuvir's sales growth will slow later in the year, raising investor concerns about the sustainability of Gilead's hepatitis C drug franchise. Gilead will close 2014 basically unchanged but still squeaking out a 4.79% gain."
Grade: A-. I was correct that the Sovaldi launch would be strong and Gilead would push past Merck in market cap. I was also right that weakness would hit later in the year, but was wrong in thinking it would revolve around sustainability of the hepatitis C market. Instead, recent weakness in Gilead is more focused on concerns about the sustainability of its hepatitis C market share.
"Merck will be the best-performing Big Pharma company of 2014. Investors will flock to Merck because of the company's commitment to shareholder friendly actions, positive data from its immune-oncology franchise and BACE inhibitor and stabilization of its Januvia franchise. Merck will end the year up 17.47%."
Grade: B. Merck remained strong on the back of its immuno-oncology franchise and stabilization of Januvia (and now the positive IMPROVE-IT data) but investors are still not locking at the BACE inhibitor. In addition, I get knocked down a bit because Eli Lilly (LLY) has been the strongest-performing pharma stock, with Abbvie (ABBV) in second place.